After riding high on bullish sentiments, July seemed to be bearish for Bitcoin as it failed to cross the $70,000 resistance several times in the second quarter. As prices dropped below $55,000 in mid July, it has emerged that Bitcoin whales have been increasing their BTC holdings by 6.3% per month, which is the greatest accumulation since April 2023.
The accumulation suggests that whales, which are some of the cryptocurrency’s biggest individual investors, are expecting prices to rise in the coming months and came despite news of massive sell-offs by the U.S. Government, a German government state, and Mt. Gox bankruptcy trustees.
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Recent Price Drops
Since the beginning of March, BTC prices have ranged between $60,000 and $70,000, testing both resistance and support on multiple occasions. However, at the start of July, the bears won with $60,000 support being broken and prices dropping to nearly $55,000 at one point. For those who bought at $70,000 peaks, that breach will cause some nerve-wracking moments, but the recent dip has also presented opportunities for savvy investors.
Whales Accumulating Holdings
Indeed, the dip has led to Bitcoin whales, who are some of the largest individual investors in the cryptocurrency market, have taken the opportunity to expand their holdings. According to reports, whales have been adding to their wallets, expanding their holdings by 6% per month, on an average. That’s the largest expansion rate since April 2023 and it suggests that these experienced investors are expecting prices to go up.
And, most analysts seem to agree. July has historically been a very strong month for BTC prices, with average gains of 9% made during the month. The cryptocurrency started July at a price of around $62,000, which means it would have to rise to more than $67,000 to match those figures, which is roughly a 15% increase from current prices.
While there are only three weeks of the month left, it certainly wouldn’t be unheard of for Bitcoin to hit that kind of bullish run. Many analysts also expect prices to go on from there, with several leading commentators predicting a price of $100,000 by the end of the year.
Recent factors contributing to BTC Drop
1) No New Money?
Worryingly for investors, one report indicates that Tether minting remains low, however. Typically, new investors in the market will buy into Tether and other stablecoins. These cryptos are tied to the value of the dollar so they do not suffer the same volatility as the rest of the market. They are popular for use on online casinos that accept crypto, and they enable investors to hold crypto without risk.
They are also used by most investors to buy Bitcoin and are minted when demand increases. As such, low minting means less money is entering the market, and with sustained low demand comes a breakdown in price. Those hoping for a bull run will want to see stablecoin minting and demand increase.
2) Germany moving BTC: Impact
However, recent BTC price increases do suggest that the market is becoming accustomed to bad news. The German government has been transferring large volumes of Bitcoins to major exchanges including Coinbase and Kraken. Initially, this coincided with price drops, but the price has rebounded a little even as similar transfers continue.
The funds form part of 50,000 Bitcoins that were received as part of a plea deal following the closure of the movie2k.to pirate movie website. It is believed that around 13,000 Bitcoins remain from the total seized. While this does represent a decent chunk of money, it means that the move is nearly over, and there is still the potential that some of the coins will need to be held in case the courts decide movie2k users are entitled to some form of compensation from the payments.
3) US Government Sell Off
The US government has also made similar moves in recent weeks, made even more notable by the fact they used Coinbase to do so, despite the SEC accusing the exchange of being an unregistered national securities exchange.
4) Mt. Gox Creditor Payments
Another group that has caused some nervousness in the market is the Mt. Gox bankruptcy trustees. The Mt. Gox exchange, which was once responsible for handling more than 70% of all Bitcoin transfers, went bankrupt in 2014 after hackers managed to steal 900,000 Bitcoins over three years. 200,000 of the coins were later recovered, but trustees were tasked with repaying creditors.
Following lengthy court proceedings, it was determined that the trustees had until the end of October 2024, to make all outstanding repayments. In June 2024, it was announced that repayments would start in the first week of July. The announcement itself caused some bearish movement in prices, and the subsequent movement of thousands of Bitcoins in early July helped push BTC prices down further.
5)ETF Impact
ETFs have given Bitcoin investors cause for good cheer since the start of the year. The SEC sanctioned the launch of exchange-traded funds in January, and products went on sale virtually immediately, seeing billions of dollars of money poured into the market. The subsequent uptick in demand saw Bitcoins prices rocket during Q1 2024.
Following that initial boost, the inevitable outflow of money, which typically arises following the first few months of new funds, has likely compounded losses, but over the past couple of weeks, there has been net inflow totaling around $300 million into these ETFs again. And, with experts expecting ETH ETFs to finally launch by the end of this month, after getting their own SEC acceptance in May of this year, we could see yet more new money coming into the market.
Conclusion: What’s Ahead?
BTC price expectations for the months ahead are positive. July is traditionally a strong month, and the market could potentially be rebounding from recent losses, although a drop to $50,000 is also still a strong possibility.
The launch of ETH ETFs will bring in some new money, although not the kind of level experienced following the launch of Bitcoin products, and as the selloff of movie2k proceeds draws to a close, it should see positive sentiment push Bitcoin prices towards its $100,000
